You can't do any such report as this before the current version of FTM2012
With the current version, you have limited capability:
Go to Places Menu
Turn on Heirarchical view (lelft button of button bar in left panel of Places)
Clean up places to get them into the heirarchical view. You must assign countries, resolve all place names (you can now resolve addresses and church names and cemetery names etc with the new resolver).
After you have (spent hours) cleaning up your places:
Go to heirarchical view:
Click on "linked to this place" or "link" to all", as you want
Go to USA
Go to your state
Go to your county
Go to your city
Now, hit the Print button in the upper right
Choose Print this report only
DON'T choose Print Place Usage Report - that will print your whole file and will take forever and a day and chew up a lot of paper.)
Play around with it and you'll get the idea.
The people within the place will be printed alpha by last name, then alpha by first name.
I think that is about as good as you are going to get.
If your Places file is like a lot of people and not resolved, you can go to a Custom Report and try to print a county or town at a time. This can be a challenge if you have a places that has other places with the same name (particularly places with common names like Washington, Fremont, Jefferson, etc).